Wendy’s and Flynn Restaurant Group have reached a deal that clears the way for Flynn to purchase half the 393 Wendy's locations operated by bankrupt NPC International, according to federal securities filings and court documents filed Thursday.
Five other operators that were part of a group Wendy’s put together to buy the restaurants will acquire the remaining locations.
The deal, which is awaiting bankruptcy court approval, paves the way for an $801 million sale of the NPC restaurants out of bankruptcy, including 925 Pizza Hut locations that will all go to Flynn Restaurant Group, or FRG.
“This is an excellent outcome for NPC’s Wendy’s restaurants and our team,” Carl Hauch, CEO of NPC’s Wendy’s division, said in a statement. “We are very pleased that our restaurants will be joining the ranks of established, high-performing restaurant franchise groups.”
Flynn, the country’s largest franchisee and an operator of Taco Bell, Arby’s, Panera Bread and Applebee’s locations, will pay a base purchase price of $552.6 million for the Pizza Hut locations and Wendy’s restaurants in Salt Lake City, Central Maryland and Baltimore.
Other Wendy’s operators previously approved by the company will acquire locations in Kansas City, North Carolina and Pennsylvania for $248.3 million, according to court documents.
NPC is the largest franchisee of both Pizza Hut and Wendy’s. It declared bankruptcy over the summer amid heavy debt and was put up for auction. FRG stepped in with a bid to buy the whole company, a deal Wendy’s objected to over concerns about Flynn’s other operations—notably Arby’s and Panera—and issues over spending on remodels and expansion.
Wendy’s had formed a coalition to bid on those restaurants with pre-approved franchisees. The two sides have been in mediation in recent weeks to settle their differences.
It’s uncertain what other terms have changed that led Wendy’s to agree to let Flynn operate its restaurants.
Still, the deal would pave the way for perhaps the biggest transaction involving a restaurant franchisee in history, one that would make Flynn—already by far the country’s largest franchisee—even bigger, giving that company major operations within six different brands.
“Flynn Restaurant Group has built our business over the last 20-plus years by focusing on managing superior operations with great teams of people at premier restaurant concepts,” Greg Flynn, founder and CEO of FRG, said in a statement. “The Pizza Hut and Wendy’s restaurants we have agreed to acquire from NPC align perfectly with this strategy, and we’re confident that our new team members will fit right in at Flynn Restaurant Group.”
UPDATE: This story has been updated to include quotes from NPC and from Greg Flynn and add other details.